On March 24, 2026, the Idaho Senate passed House Bill 863 on a 19-15 vote, sending $21.8 million in Medicaid disability service cuts to Governor Brad Little's desk. The bill cuts provider reimbursement rates for residential habilitation services. Combined with last year's cuts, providers face a cumulative 10% rate reduction. When reimbursement doesn't cover operating costs, providers stop accepting Medicaid patients.

Governor Little has 5 days from receipt of the bill to sign it into law, veto it, or allow it to pass without his signature. Families in Idaho have a narrow window to make their voices heard. Families in other states should pay attention. Idaho isn't the only state cutting disability services in 2026, and what happens here sets a template.

What HB 863 Cuts

The bill reduces how much Idaho Medicaid pays providers for residential habilitation services by $21.8 million in fiscal year 2027. Residential habilitation includes group homes, supported living arrangements, and day programs for adults and children with developmental disabilities.

The math is straightforward. A provider receives a set reimbursement rate for each hour of service delivered. If that rate doesn't cover payroll, rent, insurance, and supplies, the provider runs at a loss. Providers can absorb small losses temporarily. A cumulative 10% cut over two years isn't small.

When the bill takes effect, some providers will stop accepting new Medicaid patients. Others will close entirely. The Idaho Senate debate included multiple legislators raising this concern. Senator Melissa Wintrow stated directly that the cuts could push providers to close. Nine Republicans joined six Democrats in voting against the bill.

Dental services and outpatient therapies like occupational therapy and physical therapy are also on the chopping block under separate budget proposals. HB 863 is the first cut to pass. More are coming.

The 5-Day Governor Decision Window

Idaho law gives the Governor 5 days from the time he receives a bill to act. The bill can be signed into law, vetoed, or allowed to pass without signature. If the Governor takes no action within 5 days, the bill becomes law automatically.

Governor Little proposed these cuts himself as part of a larger budget plan to reduce state spending by 4% in fiscal year 2026 and 5% in fiscal year 2027. He recommended them in response to projected federal Medicaid funding reductions. The cuts were not imposed by the legislature over his objection. He endorsed them.

This doesn't mean the outcome is predetermined. Public pressure matters, especially when a bill passes narrowly. HB 863 passed 19-15. That's a two-vote margin. If enough families contact the Governor's office and explain what this cut means for their child's services, a veto is still possible.

How to Contact Governor Little's Office

Use the phone. Emails are logged, but a phone call requires staff to engage in real time, and call volume gets reported directly.

Governor Brad Little

Idaho State Capitol, 700 W Jefferson St, Boise, ID 83720. Phone: 208-334-2100. Website: gov.idaho.gov

When you call, keep it short and specific. Staff are tracking calls on HB 863. You don't need to explain the entire history of your child's services. You need to say three things:

1. Your child receives [residential habilitation / day program / supported living] through Idaho Medicaid.
2. You're calling to ask Governor Little to veto House Bill 863 because the rate cuts will force your child's provider to stop accepting Medicaid.
3. Your name, city, and a phone number where you can be reached if the Governor's office wants to follow up.

If the provider your child uses has already told families they're considering leaving the Medicaid network, say that. "Our provider told us in February they may stop taking Medicaid if rates are cut again." That's the data point that matters.

What Happens Under Each Outcome

If the Governor Signs HB 863

The bill becomes law. The $21.8 million cut takes effect at the start of fiscal year 2027 (July 1, 2026). Providers receive notice of the new reimbursement rates. Providers who can't operate at those rates will notify families that they're dropping Medicaid or closing.

Families will need to find new providers. When your Medicaid provider stops taking patients, you have options under federal network adequacy rules, but the process takes time. The earlier you know this is coming, the earlier you can start.

If the Governor Vetoes HB 863

The bill does not become law unless the legislature overrides the veto with a two-thirds vote in both chambers. A veto override requires 47 votes in the House and 24 in the Senate. The bill passed the Senate 19-15, which is nowhere near two-thirds. A veto would kill the bill for this legislative session.

The budget hole doesn't disappear. The Governor and legislature would need to find $21.8 million somewhere else or accept a larger deficit. Disability advocates in Idaho are pushing for revenue options instead of service cuts, including reconsidering the state's flat income tax structure. That's a political fight that goes beyond this one bill.

If the Governor Allows It to Pass Without Signature

If the Governor takes no action within 5 days, the bill becomes law exactly as if he had signed it. This outcome signals that he's not enthusiastic about the bill but isn't willing to veto it either. The effect is the same: the cuts take effect July 1, 2026.

Why This Matters Beyond Idaho

Idaho is a bellwether. National disability advocates including Nicole Jorwic at the Arc and Nicole Rafidi at Caring Across Generations have said publicly that other states are watching what Idaho does. If Idaho cuts $22 million from disability services without significant backlash, other states facing similar budget pressure will follow.

Ohio and Indiana are signaling 3-7% provider rate cuts by mid-2026. Pennsylvania's waiver reductions for transition-age youth and employment services are scheduled for mid-2026. Missouri and Utah have similar proposals on the table. The pattern is consistent: states claim federal Medicaid funding is shrinking, propose rate cuts to providers, and frame the cuts as unavoidable.

The 2026 Medicaid cuts are driven by the One Big Beautiful Bill Act (OBBBA), which reduced federal Medicaid matching funds over a 10-year phase-in. Home and community-based services are classified as optional under federal Medicaid law, which means they're the first programs states cut when budgets tighten.

If you're in Ohio, Indiana, Pennsylvania, Missouri, or Utah, you need to know what's being proposed in your state legislature right now. Budget proposals are being introduced this month. By the time a bill reaches the Governor's desk, the fight is nearly over. The time to push back is during committee hearings, not after the vote.

What Families in Idaho Should Do Right Now

Call the Governor's office. Do it today. The 5-day window starts when the bill is formally delivered to his office, which typically happens within 24-48 hours of passage. Assume the clock started March 25.

If you're part of a disability advocacy group, coordinate. Ten families calling independently is good. Fifty families calling with a shared message is better. Contact the Idaho Council on Developmental Disabilities, DisabilityRights Idaho (disabilityrightsidaho.org), and The Arc of Idaho. They're tracking HB 863 and coordinating response efforts.

If your child's provider has already sent notice that they may leave Medicaid, forward that notice to the Governor's office. Fax it to 208-334-2175 or email it through the contact form at gov.idaho.gov. Include your name and the fact that you've called.

Document everything. If the cuts take effect and your provider drops Medicaid, you'll need to file a network adequacy grievance with your managed care plan. A paper trail showing you raised the issue before the cuts took effect strengthens your case.

What Families in Other States Should Do Right Now

Find out what's being proposed in your state legislature. Most state legislatures publish budget proposals online through the appropriations or finance committee. Search for "[your state] Medicaid budget 2026" or "[your state] health and welfare appropriations."

Look for language about provider rate adjustments, reimbursement reductions, or program eliminations. If your state is proposing cuts to residential habilitation, waiver services, therapy reimbursements, or dental, those cuts follow the same pattern Idaho just passed.

Attend legislative hearings. Budget committee hearings are public. Most allow written or oral testimony from families. If you can't attend in person, many state legislatures accept written testimony by email. A short statement explaining what your child receives through Medicaid and what would happen if that service disappeared is more effective than a long policy argument.

Contact your state senator and representative. Use the same three-point structure as the Idaho call: what your child receives, what the proposed cut would do, and your ask (vote no, propose alternative revenue, exempt disability services from across-the-board cuts).

Resources

• Governor Brad Little's Office: 208-334-2100 or gov.idaho.gov
• Idaho Council on Developmental Disabilities: icdd.idaho.gov
• DisabilityRights Idaho: disabilityrightsidaho.org
• The Arc of Idaho: thearcofidaho.org
• National Disability Rights Network: ndrn.org (find your state's Protection and Advocacy agency)

The 5-day window is short, so call today. If you're not in Idaho, find out what your state legislature is proposing right now. The same bill is being drafted in multiple states. The difference between passing and failing is whether families show up.